It’s also a good idea to mention to your MC if you are not yet qualified that you might be doing this. Otherwise your MC will not know that you have the available funds. Though if you are already qualified and you never mentioned this to your MC it shouldn’t be a big deal.
I am pretty much at the initial stage.
Initial as in just completed my Action Plan/LOEs and uploaded all required documents including checking/ savings and 401k funds.
I have a 2nd meeting first week in July with another Counselor to hopefully move this along to NACA qualified.
Contemplating having the 401K funds already in a savings or money market account prior to this meeting and uploading a “new” 401K /savings /checking doc.
What I would do is make sure they are aware of what you want to do and how much you might borrow and not borrow it until you are are about to make an offer.
This does a few things. It continues to fund your retirement at your current rate. It allows you save more by deferring the loan. And you never know. If you take out 5000 now and end up needing 10000 you might not be able to get that extra money depending on how your employer’s plan is set up.
@Nelson thanks for the input.
I will certainly make sure they are aware.
This will be a disbursement of the Roth portion of the 401k I have been funding for over a decade.
Time to it from one investment to another.
Not going to be messing with any loan.
I don’t know when is the BEST time to do this, but I can tell you what I did. I told my MC that I planned to use part of my 401k for buydown. I even provided a preliminary printout of how much I planned to borrow and the terms of repayment (interest rate and length of time) so it could be considered in calculating my debt to income.
I didn’t actually withdraw the funds until My MC submitted Me for qualification. Like Someone said, the money needs to be there and liquid pretty early in the house hunting phase (either when you sign your PSL or credit access). I didn’t want Waiting on the funds to become available to hold me up in ANY way.
This reply was modified 2 years, 2 months ago by Taco.